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Bolton firm handed £300k of taxpayers’ cash faced £300k tax demand

The Bolton law firm at the centre of an escalating row over a ‘secret’ £300,000 council grant has been locked in dispute with the taxman over a demand for £300,000. The HM Revenue & Customs claim against personal injury outfit Asons Solicitors has come to light as Bolton council’s ruling Labour group comes under increasing pressure over the grant, with at least one Tory councillor demanding the resignation of council leader Cliff Morris.

The dispute is disclosed in the notes to Asons’ 2015 accounts, which show the firm lost more than £1m in the year to May last year. The note reads: 'A contingent liability exists in relation to PAYE/NIC due if HMRC are successful in their claim that previous profit extractions are chargeable as earnings from employment. The amount potentially payable is estimated to be £300,000 and is currently being challenged.’

The Gazette has put questions to Bolton Council about the grant (see below), the award of which has angered other law firms in the town. There is no evidence linking the £300,000 dispute referred to in the accounts with the same sum handed to Asons for building development work in connection with the firm’s move to new offices at Newspaper House in Bolton’s Churchgate.

According to the Manchester Evening News, the new accommodation boasts a pool table, newly fitted kitchens with all modern conveniences, a football table, a Samsung smart TV in every room and rooftop lounge garden for future barbecues.

Asons

Source: Google Street View

It emerged today that Bolton’s Labour councillors will be asked to state publicly whether they agree with a decision to award the £300,000 grant to Asons. The meeting at which the grant was approved was closed to the press and the public. A motion put forward for the council’s next full meeting on 30 November by Conservative leader David Greenhalgh will ask for a named vote.

The motion will state: 'This council disagrees and disapproves with (sic) the decision made by the leader of this council, made under Emergency Powers, to award a grant of £300,000 to Asons Solicitors towards refurbishment and occupation of their offices at 40 Churchgate, and agrees to issue a public statement to the residents of Bolton stating thus.’

Fellow Tory councillor Bob Allen has called for the resignation of council leader Cliff Morris in a letter to today’s Bolton News.

In a statement to the Gazette yesterday, Bolton council said its investment will be repaid through Asons’ business rates, which it estimates to be more than £460,000, and the return of £10m to the local economy over the next five years. But it is unclear whether the council awarded the grant in full knowledge of the government’s year-old pledge to raise the small claims limit - confirmed last week - which Asons identified as a key business risk in its accounts.

The sole director and shareholder of Asons Solicitors Ltd is solicitor Kamran Akram, admitted in 2005. The company’s accounts also show that in 2014/15 Asons purchased goods and services of £2.1m from Yourclaimlawyer Ltd, whose sole shareholder is Irfan Akram, 37, a sibling of Kamran Akram. Asons’ CEO is Dr Imran Akram (pictured top, with the madam mayor of Bolton). The transactions were undertaken on an arm's-length basis.

The notes to the accounts also disclose prior-year adjustments relating to accounting policies following a review of business processes. These resulted in:

a £2.3m change in revenue recognition to align with accounting rules on reporting the substance of transactions;

a negative movement of £1.3m in relation to understated bad debt provisions;

a £298,400 error in relation to understated accruals, and

a £170,339 corporation tax impact resulting from the above.

Asons’ accounts were given a clean bill of health by its auditor, Grant Thornton. Grant Thornton resigned as auditor of the company on 7 October this year.

A spokesperson for Asons Solicitors told the Gazette it is preparing a media statement which will 'set the record straight’, but cannot yet answer specific questions.

The Gazette’s questions for Bolton council are:

1) Before approving the grant to Asons Solicitors, was the council provided with a copy of the company’s 2014/15 accounts, filed at Companies House in May 2016? These show that the company was in dispute with HMRC over a tax claim for £300,000 (note 26).

2) If so, did the council confirm that payment of the grant would be contingent on the settlement of the tax dispute? Does Bolton council know if the tax dispute has been settled?

3) Can you confirm the grant to Asons, reported to be £300k, was made to help pay for its office move?

4) If it was, does the council consider it appropriate to spend taxpayers’ money on a new office which (according to the Manchester Evening News, 1 August) boasts a pool table, newly fitted kitchens, a football table, a Samsung Smart TV in every room, a faith room, and a rooftop lounge garden for barbecues?

5) What does the council say to law firms in the local area who compete for business with Asons but are not in receipt of such municipal largesse?

6) Was the council aware when the grant was awarded that the government already planned to raise the small claims limit for personal injury five-fold (autumn statement, 2015) which is identified as a key business risk in Asons’ accounts in terms of its future as a business?

Anon 9.42, that is not really a proper comparison. The Queen is more like a minister of religion, she has to occupy her properties in order to do her job. I somehow doubt the partners in the Bradford law firm will still be working into their 90s and generating the funds which are being spent on their property, unless sewing mail bags in HMP counts.

Clearly it is not appropriate to compare an above board decision to refurbish the Queen's residence to a highly dubious decision taken by a local authority to give £300,000 to a private business under the guise of an emergency power. It absolutely stinks.

To suggest that Asons will be employing local people massively besides the point and very likely inaccurate: reading between the lines, it seems that their office move will probably not materialise.

And, by way of footnote, do you think the Queen will be doing all £396m of the works herself, or will she be employing people to do that for her?

Anon @ 09.42 I'm not sure your comment is a valid argument. Firstly there was uproar concerning the Queen and it is to be discussed in Parliament owing to a successful petition made however, irrespective of the same the Queen has a national value and does not act in a competitive market. Asons is a slightly different situation given that they have received public funding for a private business giving them a competitive advantage over other Solicitors in the local area. It is clearly a suspect situation.

I know who the guy in the back is! It's Geraldine as played by Peter Kay, albeit pretending to be some sort of council official complete with lanyard!

I wonder if he's going to burst out in song as this has all been recorded as some sort of elaborate sketch for next year's Comic Relief? A double act with Honey G. You say Lambo, I say Ghini, Lambo... Ghini, Lambo... Ghin, I say business you say rates ...

Hang on, this firm not long ago, hailed themselves as the local Bolton heroes doing it for the community and if I'm not mistaken had a family wedding covered in the press. They were going to build a multi million pound office. They were offering training contracts by the fistful. Showing those of us whose only business interests is law how wrong we all were while they with a so called empire built on petrol filling stations would show us different.Great self publicity with well groomed individuals with expensive watches(actually some close individual to them even commented on LinkedIn about the watch which speaks volumes)How about simple creative accounting So much for all the accolades and public awards.But hey let's not get ahead of ourselves let's read the press release when it arrives.Is there a reason they're referred to as an "outfit "....?

I trust that the answers to the detailed FOI request made by an earlier writer will be shared via the Gazette. Is there a time limit for responses?

I finished a message commenting on the earlier article with the wry question: "I wonder what Sir Thomas Lund would have said?"

Tommy Lund was, for those under I guess 65, the LS Sec General for decades including my start in 1960. He ran the LS and the profession with a rod of iron. The profession was a great and respected one.

If this saga ends badly, will those who have dismantled that profession or collaborated in that process, while simultaneously piling regulation on regulation for those conducting their affairs in a way Tommy would have applauded, have the decency to blush?

I do wonder what is going through the mind of the gentleman standing to the left of the Mayor with his eyes closed. Is he thinking - how can we get or how have we got away with this or perhaps what am I going to spend my tax payer's money on next? Answers on a postcard please to Private Eye as I cannot wait to read what they say about this in their illustrious organ. What were the councillors thinking and what are they thinking now having put £300k at risk?

Is that man at the back closing his eyes because he's pretending that it's all not happening, or is he in reverie?

These things always have a habit of running and running until someone gets the boot, or taken away. When these grants are handed out, what kind of due diligence needs to take place? Those of you familiar with tendering for council work, will know that they always enquire whether there is any relationship between an employee of the law firm and the council.

I can see this as a modern maths question. If a new Lamborgini costs £180,000 and £20,000 can be saved for each council EMI day care centre worker made redundant, how many have to be made redundant to provide a solicitor with a means of travel?

Candidates will be awarded extra marks for suggesting that discounts can be obtained on Lamborginis if a fleet purchase is made.

Why couldn't they borrow money from the bank like any other commercial enterprise? Ah yes, the small matter of their accounts show they made a huge loss last year. The Council could have made an informed judgement about this grant for the cost of £1 to Companies House.

I don't see the relevance of referring to pool tables and Samsung TVs in FOI requests. In case anyone is interested, this is the FOI request which I have sent to Bolton Council:

These requests relate to monies paid or to be paid by Bolton Council to Asons Solicitors Ltd, including monies paid or to be paid to any person, company or organisation associated with or connected to Asons (collectively referred to in these requests as “Asons”).

Please:

1. Disclose the precise amount(s) which Bolton Council has paid or agreed to pay to Asons.

2. Name the entity to which each of those amounts has been paid or is to be paid.

3. Identify the legislation (or delegated legislation) pursuant to which Bolton Council made or agreed to make the payments referred to in requests 2 and 3 above.

4. Disclose a copy of all documents and correspondence (including but not limited to minutes of meetings and electronic documents and correspondence) relating to any payments made or agreed to be made to Asons, including (but not limited to) all documents and correspondence relating to Asons' request (or requests) for funding, the Council's consideration of that request (or those requests) and the payment of the monies to Asons.

5. Without prejudice to the generality of request 4 above, disclose a copy of any legal advice which Bolton Council obtained before agreeing to make the relevant payments.

6. Disclose any relationships (whether business, social or otherwise) or connections which any member of Bolton Council has with any director(s) or employee(s) of Asons.

In all my days I have never heard of anything like this. The transaction is plainly weird on two fronts. Firstly the Council should not be granting money to private enterprises for the specified purpose of moving offices and preserving jobs - especially since that puts Asons at a commercial advantage over other law firm competitors. Secondly, if you were intending to make such a grant then why on earth would you do so to a company whose accounts suggest that it is losing money hand over fist, is in dispute with HMRC and operates in a low value low margin business like PI claims?

As Imran Akram recently boasted as follows on social media that he was picking up the keys to his sixth Lamborghini in four years ("Key handover of my 6th #Lamborghini in 4 years #64reg", posted next to a picture of him and the car) , on what basis did they think his firm were in need of a grant at all?

Quelle surprise! SRA, I would be hotfooting it down, or rather up, there as fast as you can go. If you cannot see this scenario as a warning light that all might not be well with this firm, you never will.

Best not tell the tabloids about all this. They are bound to misinterpret what is obviously a perfectly innocent situation, and see it as "Fat cat Lambo lawyers get council tax payers to pay their tax bills."

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